The U.S. attorney in Los Angeles is pursuing the theory that the prelate deprived parishioners of 'the right of honest services' by failing to protect their children from predatory clerics.

The U.S. attorney in Los Angeles has launched a federal grand jury investigation into Cardinal Roger M. Mahony in connection with his response to the molestation of children by priests in the Los Angeles Archdiocese, according to two law enforcement sources familiar with the case.

The probe, in which U.S. Atty. Thomas P. O'Brien is personally involved, is aimed at determining whether Mahony, and possibly other church leaders, committed fraud by failing to adequately deal with priests accused of sexually abusing children, said the sources, who requested anonymity because they are not authorized to speak publicly about the investigation.

Authorities are applying a legal theory in an apparently novel way. One federal law enforcement source said prosecutors are seeking to use a federal statute that makes it illegal to "scheme . . . to deprive another of the intangible right of honest services."

In this case, the victims would be parishioners who relied on Mahony and other church leaders to keep their children safe from predatory priests, the source said.

To gain a conviction on such a charge, prosecutors would have to prove that Mahony used the U.S. mail or some form of electronic communication in committing the alleged fraud, the source said.

The inquiry has been underway since at least late last year, the source added.

O'Brien declined to comment, refusing to even confirm the existence of the investigation.

J. Michael Hennigan, who represents Mahony and the archdiocese, confirmed that federal prosecutors had contacted the archdiocese and requested "information about a number of individual priests, at least two of whom are deceased."

He said he was also aware that some witnesses had testified before the panel.

But Hennigan said he has been informed that Mahony is not a target of the inquiry.

"We have been and will continue to be fully cooperative with the investigation," Hennigan said.

Mahony has repeatedly apologized for the church's sex scandal and asked for forgiveness for not acting sooner to remove priests who abused minors. He has declared that the archdiocese handles abuse allegations seriously, notifying police when complaints are made and removing priests from active ministry when allegations are deemed credible.

As the Catholic Church's highest-ranking official in Southern California, Mahony has been dogged for years by allegations of covering up the sexual misconduct of priests.

The cardinal was accused of transferring priests who molested children to other parishes rather than removing them from the priesthood and alerting authorities.

One priest, Michael Stephen Baker, told Mahony in 1986 that he had molested children, but he was allowed to remain in active ministry. Mahony sent Baker to a treatment center in New Mexico and later reassigned him to other parishes, where he allegedly victimized children.

Prosecutors later filed criminal charges against Baker. He pleaded guilty to molesting two boys and was sentenced in 2007 to more than 10 years in prison.

Mahony also came under fire for vigorously fighting attempts by prosecutors, victims and the victims' attorneys to gain access to the church's personnel files, which tracked the problems of accused priests and the church hierarchy's reaction to them.

Mahony argued that the records should remain confidential, but Los Angeles County Dist. Atty. Steve Cooley accused the archdiocese of engaging in a "pattern of obstruction." Mahony was eventually ordered by the courts to turn the files over to prosecutors.

The district attorney's office launched a grand jury investigation into the archdiocese several years ago, but no charges were filed. District attorney's spokeswoman Sandi Gibbons said Wednesday that prosecutors are continuing to look at documents from the archdiocese for evidence of molestation by priests and former priests but that charges against Mahony are "highly doubtful."

Two years ago, the archdiocese agreed to pay $660 million to 508 people who accused priests of sexual abuse. The payout was the largest settlement in a scandal that has involved an estimated 5,000 priests nationwide and cost the Roman Catholic Church more than $2 billion to resolve cases in this country alone.

David Clohessy, national director of the Survivors Network of Those Abused by Priests, said he had not heard about the latest investigation but welcomed the new scrutiny of Mahony.

"It is long, long overdue," Clohessy said. "It is just crucial that the hierarchy face criminal charges, because almost every other conceivable means have been tried to bring reform."

Legal experts said the theory that prosecutors are pursuing is usually reserved for cases against public officials, such as politicians and law enforcement officers, and corporate executives accused of wrongdoing.

In Mahony's case, prosecutors would have the difficult task of defining the "honest services" expected from a Catholic cardinal, said Laurie Levenson, a Loyola Law School professor and former federal prosecutor. Then they would have to persuade jurors that criminal charges were not a stretch.

"I'd put it in the category of creative lawyering," she said. "It doesn't mean it's bad. But it will be challenging to not only get charges on these grounds but, if they get charges, to win a conviction."

Rebecca Lonergan, a professor of law at USC and a former federal prosecutor, said she was unaware of the law's ever being used to charge a member of the clergy.

"They would have to show some intentional wrongdoing rather than just after-the-fact cover-up," she said. "I think it would be a creative, new and different way of using the statute."